Professional Documents
Culture Documents
October 2007
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EL E C T RO N I C S
October 2007
EL E C T RO N I C S
October 2007
Low penetration levels of user industries indicate potential for continued growth in the sector
The demand for electronics is expected to be fuelled by the growth of - Telecommunications (250 million subscribers by 2007) - PCs and notebooks (5 million every year) - Broadband connectivity reaching rural areas (600,000 knowledge centers by 2007)
Steady and Sustained growth
Year 2006-07 2000-01 0 5 6.0 10 15 20 25 30 25.0 CAGR 26%
US$ billion
Source: www.mit.gov.in
EL E C T RO N I C S
October 2007
2004-05
2003-04
2002-03
2001-02
2000-01
500
1000 1500
2000 2500
3000 3500
4000
INR Crores
n Electronic Components n Communication and Broadcasting Equipments n Computers n Industrial Electronics n Consumer Electronics
EL E C T RO N I C S
October 2007
Several MNCs have been looking at setting up contract manufacturing facilities in India
175,000-square-foot facility located in Ranjangaon, near Pune, in the state of Maharashtra Printed circuit board, enclosure integration and distribution and repair services with in-region design services support To serve the consumer, instrumentation, networking, peripherals and telecommunications industries
EL E C T RO N I C S
October 2007
Several MNCs have been looking at setting up contract manufacturing facilities in India
Acquired three design-centric companies Hughes Software Systems, DeccaNet and FutureSoft and consolidated the software companies into a new subsidiary based in India Higher-value, higher-margin design services for cell phone and telecom/networking software Nokia and Alcatel are among the existing customers Also maintains an ongoing investment in Celetronix, one of the largest electronics equipment manufacturers in India
EL E C T RO N I C S
October 2007
Several MNCs have been looking at setting up contract manufacturing facilities in India
Manufactures 4 to 6 million handsets per year, fast measuring up to its client Nokias plant in China that manufactures 35 million handsets per year Indian players such as TVS Electronics and D-Link are also established in this domain
EL E C T RO N I C S
October 2007
The Government has played a supporting role in enabling the industry to realise the potential
Key policy initiatives include: Customs duty on ITA-1 items (217 items) has been abolished from March 2005 Excise duty on computers has been removed. Microprocessors, Hard Disc Drives, Floppy Disc Drives and CD ROM Drives exempt from excise duty 100 % foreign equity participation is permissible Robust IP act to facilitate innovation, growth as well as development in the sector As a result of market forces and policy support, all segments of the industry have been growing
EL E C T RO N I C S
October 2007
Overall, the sector presents attractive opportunities for investment and growth
HIGH MEDIUM LOW Threat of New Entrants Many MNCs are already present and well established Requires investment in localisation, distribution reach High growth potential could attract new entrants
EL E C T RO N I C S
October 2007
Overall, the sector presents attractive opportunities for investment and growth
Supplier Power Adequate supplier base Most suppliers are small in scale and size as compared to manufacturers Competitive Rivalry Well established, strong players Brand, cost and distribution are key differentiators Ample opportunities for growth
EL E C T RO N I C S
October 2007
The sector is competitive and investors need to have the right approach and focus to succeed
Customer Power Wide choice of products Well informed, increasingly demanding customers Low penetration levels, large untapped market Threat of Substitutes No substitutes currently for products in the sector
EL E C T RO N I C S
October 2007
7% 4% 10%
13%
39% 27%
US$ billions
n Consumer Electronics - 7.5 n Communication & Broadcasting - 2.0 n Industrial Electronics - 1.4
EL E C T RO N I C S
October 2007
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October 2007
High
High
High
High
Moderate
Specific Government High Incentives Overall Attractiveness Source: KPMG Research High
High High
High Moderate
Moderate Moderate
Moderate Moderate
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DISCLAIMER
This presentation has been prepared jointly by the India Brand Equity Foundation (IBEF) and KPMG Advisory Services Private Limited (Author). All rights reserved. All copyright in this presentation and related works is owned by IBEF and the Author. The same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval of IBEF. This presentation is for information purposes only. While due care has been taken during the compilation of this presentation to ensure that the information is accurate to the best of the Authors and IBEFs knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice. The Author and IBEF neither recommend or endorse any specific products or services that may have been mentioned in this presentation and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed in this presentation. Neither the Author nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any reliance placed or guidance taken from any portion of this presentation.
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